Will CANDU Do?

The sculpture—a large translucent ice block with the words “Team candu” chiselled into it—wasn’t destined to enjoy a long life in the overheated ballroom of Ottawa’s Westin hotel. But for the almost five hundred executives, scientists, and government officials gathered there one evening in February, it was something to talk about as they foraged at the Asian-fusion smorgasbord and waited for Robert Van Adel, president of Atomic Energy of Canada Ltd. (aecl), to take the podium. With twenty-seven reactors under construction around the world and more than a hundred others proposed, Van Adel seemed genuinely upbeat about the state of the industry. “We’re ready to lead the nuclear resurgence,” he said. “Not just in this country, but internationally.” And then he thanked the Canadian government for five decades of financial support (amounting to over $20 billion from taxpayers’ pockets).

You could forgive Van Adel’s bullishness. After all, the mood at the party hearkened back to the heady days of the 1960s, when science fairs across the country were alive with expositions featuring the Avro Arrow and the candu nuclear reactor, Canada’s homegrown miracle machines. candu skeptics in the ballroom, including environmentalists opposed to nuclear energy and salespeople from rival reactor manufacturers, seemed happy enough to sip their drinks and applaud Van Adel. This was no place to remind him that in recent years the candu has been largely shut out of major markets around the world—and unless Ontario chooses to build the reactor as part of its $40-billion nuclear renaissance, the candu will likely join the Avro Arrow on the expensive scrap heap of Canadian industrial policy.

It’s been more than sixty years since a team of Canadian, American, and British researchers fired up Canada’s first nuclear reactor, the Zero Energy Experimental Pile at Chalk River, Ontario. The zeep was uniquely Canadian. While American reactors run on enriched uranium, which is also used in nuclear weapons, the zeep was powered by natural uranium, which pleased Canadian politicians opposed to the nuclear-arms race. The reactor worked by harnessing atomic fission using a heavier form of water containing deuterium in place of hydrogen. By 1958, engineers with aecl had refined the zeep into a design they dubbed Canada Deuterium Uranium, or candu.

Unlike reactors built elsewhere, most of which copy US models that contain the process within a single high-pressure vessel, the Canadian design features hundreds of pressurized tubes. Although this made the original candus more stress-prone and difficult to maintain, they had one critical advantage over their American rivals: they could be refuelled without being shut down, an attractive cost-saving feature that helped elevate Canada’s peaceful nuclear superiority into nationalist lore in the 1960s and ’70s.

The candus were soon widely considered to be the Porsche of reactors—though not, as it has turned out, the workhorse. By the late 1990s, the candu’s competitive edge had been largely eroded by a dramatic shortening in the time needed to refuel American-designed reactors. This prompted Ron Osborne, former president and chief executive officer of Ontario Power Generation Corp., the provincial utility that currently operates ten reactors, to conclude that the candu could no longer claim an efficiency that offset its complex design. Said Osborne in a blunt critique: “The operating capacities at the very best American plants are superior.”

The reactors were born in an era when Canadian science and technology breakthroughs weren’t unexpected. But unlike the Avro Arrow, which was abandoned by Ottawa, the candu was a political love child never forsaken by its parliamentary parents. Its upbringing was suitably expensive, and the spending has been sustained: in 2004 and 2005, subsidies amounted to $2.4 billion.

Today, thanks largely to former prime minister Jean Chrétien, who was relentless in his support, aecl is one of the largest reactor manufacturers in the world. Twenty-two candus have been constructed in Canada and eleven have been built abroad. The Canadian reactors generate an estimated $2.7 billion worth of electricity annually and support 30,000 jobs. “Chrétien really loved the candu,” recalls Osborne. “There was something personal about it for him.”

But on the international stage Canadian nuclear technology developed a dubious reputation: the candu, as it turned out, seemed to be the choice of dictatorial regimes and was shunned by most democracies. Authoritarian rulers in countries like South Korea and Romania were slavishly courted and the standards surrounding reactor sales were relaxed. To sell two candus to China in 1996, Chrétien dipped into the Canada Account—a fund used at the discretion of Cabinet—in order to lend $1.5 billion, on never-disclosed terms, to that burgeoning state. With Chrétien backstopping the sales, aecl had little trouble outbidding American and European competitors. And when the Sierra Club of Canada filed a federal court challenge claiming that the use of public money automatically required the Chinese reactors to be assessed under Canadian environmental law, the federal government forced them into a six-year war of legal attrition while construction was completed.

Earlier sales of the technology to Pakistan and India in the 1960s raised more troubling questions after both countries built nuclear weapons. Canada suspended nuclear trade with India after it used Canadian technology to develop a bomb in the 1970s. These sanctions remained in place until last summer, when then—Prime Minister Paul Martin quietly agreed to renew relations with India despite its refusal to sign the Treaty on the Non-Proliferation of Nuclear Weapons. As always, aecl seems to have got its way with the government. “I think they finally decided that for good and sufficient self-interest we should do this,” said Reid Morden, a former aecl president.

While Ottawa continues to push the sale of candus to old customers like Romania, it is being shut out of major markets just as the industry is expanding internationally. In fact, at the risk of wrecking his own party, Van Adel might have described the past year as the candu’s very own annus horribilis. It began when Dominion Resources, one of the largest US utility companies, abandoned interest in using candu technology. aecl had been counting on Dominion to license its product for sale in the United States, where the Bush administration is channelling $12 billion (US) into the construction of new reactors.